Gold prices stuck in neutral as ISM Manufacturing Index rises to 61.1
Editor's Note: The article orginaly printed a wrong number for the headline increase in the September ISM Manufacturing Index. The data has been corrected.
(Kitco News) - The gold market continues to struggle to attract sustainable bullish momentum as the price hovers around $1,750 an ounce following better than expected U.S. manufacturing data.
Friday, the Institute for Supply Management (ISM) said its manufacturing index showed a reading of 61.1% for September up from August’s reading of 59.9%. The data was stronger than expected, as consensus forecasts were calling an relatively unchanged reading.
"This figure indicates expansion in the overall economy for the 16th month in a row after contraction in April 2020," said Timothy Fiore, chair of the ISM Manufacturing Business Survey Committee.
The latest data appears to be having little impact on gold as it hovers in neutral territory. December gold futures last traded at $1,757 an ounce.
However, looking past the headline increase, Fiore noted that the manufacturing sector still faces some difficult hurdles.
“All segments of the manufacturing economy are impacted by record-long raw materials lead times, continued shortages of critical materials, rising commodities prices and difficulties in transporting products. Global pandemic-related issues — worker absenteeism, short-term shutdowns due to parts shortages, difficulties in filling open positions and overseas supply chain problems — continue to limit manufacturing growth potential,” he said.
Looking at some of the components of the report, the New Orders Index was unchanged at 66.7%. Meanwhile, the Production Index dropped to a reading of 59.4%, down from August’s reading of 60%.
The labor market saw some new momentum last month. The report said that the he Employment Index increased to 50.2%, 1.2 up from August reading of 49%
Positive for gold prices, inflation pressures continue to rise. The report said that the Prices Index rose to 81.2%, up compared to the August figure of 79.4%.